"What's better than beer and statistics?" - Anonymous
I'm not buying all this economic doom and gloom that pundits and other media outlets are fretting about for early 2013. We've all seen the reports, the political posturing, the negativity. I'm not buying it for a number of reasons. Pull up a bar stool and I'll fill you in (and fill up your pint), and hang on!
Amber Ale
The residential construction market is coming back strong, with the federal government and housing experts even predicting an impending
housing shortage as U.S. population growth continues to outpace residential builders' ability to keep up (many builders went out of business during the crash).
Commercial construction spending, after three years of heavy declines from 2008 - 2011, rose last year
8.09 percent. Demand creates jobs.
A lot of this is driven by population growth. Locally, the latest census data shows Kent County grew by
5300 people in 2011, the strongest one-year growth in 10 years. The City of Grand Rapids grew by 1600 people, also the strongest one-year growth in 10 years. Net domestic migration (the difference between the number of people who arrive in Grand Rapids from another city vs. leave Grand Rapids for another city) was positive (+) for the first time since 1991.
Downtown Grand Rapids grew by more than 30 percent from 2000 - 2010, and some have pegged it close to 5000 people now living within the traditionally defined "downtown" area. Over 500 housing units have been added downtown in the last two years and almost all have been absorbed. We've covered this before in a previous editorial, but Grand Rapids has become the number one destination city for Michigan college grads.
Michigan even saw population growth last year, the first time in a decade.
Porter
If you look at the existing housing market, trend arrows are pointing up for the first time in years. In November 2012, year-to-date sales in the Grand Rapids area were up almost 17 percent, and average home prices had risen by 9 percent year-to-date. The percentage of home sales that were distressed or foreclosed sales last year were the lowest in five years.
Across the State of Michigan, sales were up 12 percent over this time last year, and home sale prices were up 10 percent. In Oakland County, one of Michigan's most populous and wealthiest counties, home sale prices rose a whopping 22 percent over the previous year.
It doesn't hurt that thirty-year fixed mortgage rates, at the time of this writing, were still hovering around record lows of about 3.5 percent.
Imperial Stout
The Grand Rapids-Wyoming MSA Unemployment rate dropped to
5.6 percent in October 2012,* lower than the national average of 7.9 percent and lowest October rate since 2007.
15,000 jobs have been added just in the last year alone locally, 3000 more people than the Van Andel Arena can hold for a concert. Almost 21,000 have been added in the last two years. The rate of employment growth from 2010 to today has surpassed the employment growth of the boom years of 2003 - 2007.
*November's rates came out since this article was written and dropped again to 5.4%.
Compared to unemployment rates of other large metro areas around the country,
Grand Rapids at 5.6 percent is doing pretty well. Take a look.
October 2012 rates:
Phoenix: 6.9
Denver: 7.4
Hartford, CT: 8.6
Tampa: 8.2
Indianapolis: 7.1
Baltimore: 6.8
Des Moines: 4.7
Las Vegas: 11.1
Austin, TX: 5.3
LA: 9.6
Raleigh: 7.0
Portland, OR: 7.5
Houston: 6.2
Salt Lake City: 5.0
Seattle: 6.9
Chicago: 8.3
Three other Michigan metro areas, including Holland - Grand Haven, Ann Arbor, and Lansing - East Lansing, were in the top 25 percent for lowest unemployment rates in the U.S. in October.
Income in the Grand Rapids - Wyoming MSA even grew by about 3 percent in the past year.
American IPA
North American car and light truck sales (a big driver of the Michigan economy) are predicted to finish up at a healthy 14.3 million for this past year, up from 9 million in 2009.
Fifteen million are predicted for next year. Demand drives job growth.
Manufacturing, a big part of Michigan's and the United States' economies, is also on the rise again. (The U.S. is still the world's largest manufacturer, producing 18.2 percent of the world's durable goods). According to the U.S. Census Bureau
Economic Indicators, U.S. Manufacturing and Trade Inventory and Sales are at record highs, as well as Retail and Food Services Sales. The Quarterly Services Survey is also at record highs (records began in 2003).
The Finish: Black and Tan
What really remains to be seen is what happens over the next 5 - 10 years, as the largest population group in U.S. history (Gen Y and Millennials born between 1981 - 2006, constituting 70 Million individuals) moves into its prime employment and income years. What will these young people want in the way of housing, amenities, opportunities, and governance?
All indications are showing that they want strong urban centers, more recreational offerings, diverse populations, and more walkable and less car-oriented communities than generations before them. Opportunities abound for those positioned to provide in those areas.
*Disclaimer, I did put Beer City USA in the title to get you to click on the article. To whet that appetite and reward you for reading down this far, we might also add that
Founders Brewing Company is expanding once again with another
$26 Million addition and adding up to 52 new jobs, upping its capacity to 300,000 barrels per year and vaulting it from the
42nd largest craft brewer to around 25th. And let's not forget that the iconic
Grand Rapids Brewing Company name has once again made its home in downtown Grand Rapids.
Cheers
Beer City, and Happy New Year!
Jeff Hill is the Publisher of Rapid Growth Media, and holds a degree in communications and economics from Western Michigan University.